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A BILL TO BE ENTITLED
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AN ACT
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relating to the effect of a foreclosure on a preexisting |
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residential tenancy. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 24.005, Property Code, is amended by |
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amending Subsection (b) and adding Subsections (b-1), (b-2), (b-3), |
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and (b-4) to read as follows: |
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(b) If the occupant is a tenant at will or by sufferance, the |
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landlord must give the tenant at least three days' written notice to |
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vacate before the landlord files a forcible detainer suit unless |
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the parties have contracted for a shorter or longer notice period in |
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a written lease or agreement. |
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(b-1) If a building is purchased at a tax foreclosure sale |
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or a trustee's foreclosure sale and is occupied by a residential |
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tenant [under a lien superior to the tenant's lease] and the tenant |
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timely pays rent and is not otherwise in default under the tenant's |
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lease or tenancy after foreclosure, the tenant: |
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(1) may occupy the tenant's unit until the end of the |
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remaining term of the lease if the lease is bona fide and was |
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entered into before the date the title to the building is |
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transferred to a successor in interest pursuant to the foreclosure, |
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except that the successor in interest may terminate the lease |
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effective on the date of sale of the unit to a purchaser who will |
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occupy the unit as a primary residence, if the successor in interest |
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gives the [purchaser must give a residential] tenant [of the
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building] at least 90 [30] days' written notice to vacate; or |
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(2) must vacate the tenant's unit if the tenancy is a |
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bona fide tenancy without a lease or the tenant has a bona fide |
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lease that is terminable at will if the successor in interest gives |
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the tenant at least 90 days' written notice to vacate [if the
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purchaser chooses not to continue the lease]. |
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(b-2) The tenant is considered to timely pay the rent under |
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Subsection (b-1) [this subsection] if, during the month of the |
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foreclosure sale, the tenant pays the rent for that month to the |
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landlord before receiving any notice that a foreclosure sale is |
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scheduled during the month or pays the rent for that month to the |
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foreclosing lienholder or the purchaser at foreclosure not later |
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than the fifth day after the date of receipt of a written notice of |
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the name and address of the purchaser that requests payment. Before |
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a foreclosure sale, a foreclosing lienholder may give written |
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notice to a tenant stating that a foreclosure notice has been given |
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to the landlord or owner of the property and specifying the date of |
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the foreclosure. |
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(b-3) A lease or tenancy is considered to be bona fide for |
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purposes of Subsection (b-1) only if: |
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(1) the mortgagor or the child, spouse, or parent of |
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the mortgagor is not the tenant; |
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(2) the lease or tenancy was the result of an |
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arm's-length transaction; and |
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(3) the lease or tenancy requires the receipt of rent |
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that is not substantially less than fair market rent for the |
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property or the unit's rent is reduced or subsidized due to a |
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federal, state, or local subsidy. |
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(b-4) Subsection (b-1) does not affect the requirements for |
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termination of a government subsidized tenancy. |
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SECTION 2. Section 33.51(b), Tax Code, is amended to read as |
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follows: |
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(b) The officer charged with executing the writ shall place |
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the purchaser or the purchaser's assigns in possession of the |
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property described in the purchaser's deed without further order |
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from any court and in the manner provided by the writ, subject to |
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any notice to vacate that may be required to be given to a tenant |
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under Section 24.005(b-1) [24.005(b)], Property Code. |
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SECTION 3. This Act takes effect September 1, 2019. |